PBF Energy announced the completion of the second crude oil unloading facility at its subsidiary’s Delaware City Refinery.
The New Jersey company that brought the refinery back to life in 2011 also plans to bring in more heavy crude from Canada, while adding more rail cars and unloading capacity.
The construction of the 70,000 barrel per day rail facility was announced in mid-2012 and was completed on schedule and on budget.
The first unit train of North Dakota Bakken crude oil is expected to be unloaded this week with 17 additional unit trains scheduled to arrive in the next two weeks. With the completion of the project, the Delaware City rail facilities are now capable of discharging 110,000 barrels per day of crude oil directly at the refinery – 40,000 barrels per day of heavy crude oil and 70,000 barrels per day of light crude.
The tank car trains could add to travel times and noise from train horns in the Bear-Glasgow area near the refinery.
Delaware State Sen. Bryan Townsend, D-Newark, Rep. Earl Jaques and members of the Christiana Fire Company attended a briefing by Norfolk Southern Corp. The legislators were told that at time during the week, 100-car trains will passing through the area to deliver oil to the refinery.
Affected heavily traveled crossings will be Route 4, Old Baltimore Pike Route 72, , Route. 40 and Porter Road. This will mean a six to eight- minute wait at tracks. Legislators said they hope the trains will come into the area during the night.
The route currently sees a few trains a day that carry freight for the state’s poultry industry and other downstate businesses. Amtrak also uses the tracks for passenger cars coming from its repair center in Bear.
The refinery has historically relied on crude oil from overseas sources. It is capable of refining “sour” or heavy crude oil that can be bought at a discount.
Tom Nimbley, PBF Energy’s Chief Executive Officer, said, “The completion of this premier rail facility puts our East Coast refining system at a competitive advantage compared to its Atlantic basin peers. PBF is now able to deliver significant quantities of cost-advantaged North American crude oils directly to Delaware City at very competitive pricing.”
PBF Energy also announced that it has increased its previous guidance on the quantity of Canadian heavy crude that it can process at its Delaware City refinery. Based on the success the company has had running the Canadian heavy crudes to date, PBF Energy plans to increase the discharge capacity of the heavy crude rail unloading facility to 80,000 barrels a day.
Nimbley further stated, “We believe that Canadian heavy barrels will be the most economic barrels on the market and we intend to take the necessary steps to maximize our exposure to this advantaged crude.”
Bloomberg reported the price differential between North Dakota and Canadian crude and lighter and higher-priced Brent crude runs between $20 and $49 a barrel.
The new rail project should add an additional 40,000 bpd of heavy crude unloading capability to the existing 40,000 barrel per day rail facility. The project is anticipated to cost approximately $50 million and to be completed in the fourth quarter of 2013. The project is expected to be approved at the company’s February board meeting.
PBF Energy further announced that it has entered into agreements for an additional 2,000 coiled and insulated rail cars capable of handling heavy crude oil and 500 general purpose cars. The 2,000 coiled and insulated cars are expected to be delivered beginning in 2014 through the first quarter of 2015 and the 500 general purpose cars will be delivered in 2013. This will bring PBF Energy’s total number of owned or leased coiled and insulated cars to 3,600 and allow the company to move the previously mentioned 80,000 barrels per day of Canadian heavy crude in its own rail cars.
PBF overhauled and reopened the refinery in 2011 after previous operator Valero closed the site and was moving towards its demolition. Assistance from the State of Delaware was part of the financial package that led to the sale.
PBF also owns refineries in Paulsboro, N.J. And Toledo, Ohio. Its stock is now listed on the New York exchange.
